Francesco Filippucci: What Do NEETs Need? The Effect of Combining Activation Policies and Cash Transfers (Online)

FBK-IRVAPP is pleased to invite you to the following seminar: What Do NEETs Need? The Effect of Combining Activation Policies and Cash Transfers

With the participation of Francesco Filippucci, Paris School of Economics

Language: the seminar is held in English.

Abstract: Activation policies and cash transfers are often used jointly, but the literature has only evaluated them one conditional on the other. This paper evaluates an innovative French program that provided a year of cash transfers and intensive activation measures to disadvantaged youth Not in Employment Education or Training (NEETs). I develop a difference-in-difference methodology that extends De Chaisemartin and D’Haultfœuille (2020a) to a setting where individuals enter the population of interest in cohorts. While no significant effect was found when participants are enrolled, after completion of the program compliers reported an increase of 33 percentage points in the probability of employment and of 72 hours worked on a quarterly basis. No effect was detected on wages. I investigate the mechanisms using the timing of activation measures, the phase-out of the cash transfer, and a framework with discrete labor supply and search frictions. I find that the zero effect during enrollment arises from a negative reaction to implicit taxation from transfer phase-out, lock-in from training, and a counterbalancing positive effect of activation. This finding suggests potential complementarities between cash transfers and activation measures. Moreover, it shows that disadvantaged NEETs have low job finding rates at baseline, large elasticity of labor supply, and significant time constraints.

The seminar will be held on the web conference platform Google meet.